Loan Against Property (LAP) – A Full Detailed Guide 2022

By | July 4, 2022

Today I will tell you about Loan Against Property (LAP)

If you have any property which is free from any debt, you can take loan by keeping that property as collateral

What is Loan Against Property?

Loan Against Property (LAP)

Loan Against Property (LAP) is a secured loan taken against a commercial or residential property held with the lender as collateral. As the funds come without any end use restrictions, borrowers can use the funds for various purposes like business expansion, weddings, etc. child’s educatione.t.c.

Benefits of LAP –

  • simple approval process
  • attractive interest rates
  • continued ownership
  • Easy and hassle free documentation
  • optimum use of assets
  • Claiming interest as expense (for business person only)

Eligibility Criteria for LAP

Loan against property is offered to the following persons –

a) salaried – A person who is in permanent service in the Government or in a reputed company. Also, he/she should be more than 24 years of age at the time of commencement of the loan and till the age of superannuation.

b) self-employed businessmen Any person who is filing Income Tax Return (ITR) and whose age is more than 24 years at the time of commencement of the loan and up to 65 years at the time of maturity.

c) self employed professionals Professionals like Doctor, Engineer, Dentist, Architect, Chartered Accountant, Cost Accountant, Company Secretary and Management Consultant can apply. The age criterion is the same as for self-employed persons.

Documents Required for LAP

salaried person Self Employed Professionals/Businessmen
  • Application form, photo attached
  • Application form, photo attached
  • Valid photo identity (such as Voter ID Card, Passport, Aadhar Card, PAN Card, Driving License)
  • Valid photo identity (such as Voter ID Card, Passport, Aadhar Card, PAN Card, Driving License)
  • proof of current residence
  • proof of current residence
  • Latest Pay Slip (Minimum 3)
  • Proof of Professional existence, Certificate of Educational Qualification
  • For Professionals – Last 3 years IT Return (Own and Business), Last 3 years Balance Sheet and P&L Statement.
  • For Businessmen – Business Profile, IT Return of last 3 years (Own and Business), Balance Sheet and P&L Statement of last 3 years.
  • List of directors and shareholders along with their individual shareholding as certified by CA/CS in case of business entity being a company.
  • Memorandum and articles of association of the company.
  • A partnership deed in the case of a business entity is a partnership firm.
  • Bank statements for the last six months
  • Bank statements for the last six months – both business and personal in case of businessmen
  • a check for processing fee
  • a check for processing fee

frequently Asked question –

Against which type of assets LAP can be taken?

  • Self-owned and self-occupied residential property
  • Self owned but rented residential property
  • self-owned piece of land
  • self owned commercial property
  • Self-Owned But Rental Commercial Property

Can I take loan against property for any reason?

Loan against property can be taken for the following purposes. They are as follows-

  • for business expansion
  • get your son/daughter married
  • Send your son/daughter abroad for higher education
  • Funding for the Vacation of Your Dreams
  • medical treatment funding

What is the maximum loan amount a person can get in LAP?

A person can get a maximum loan of up to Rs 25 crore on LAP. However, the LAP should not exceed 60% of the market value of the property. The maximum loan taken will vary from bank to bank.

What is the minimum credit score required to get LAP?

the minimum credit score To get LAP is required a CIBIL Score 750 and more.

What can be the maximum repayment tenure and interest rate of LAP?

The maximum repayment period of LAP is 15 to 20 years. While the interest rate will vary from bank to bank the interest rate will be somewhat between 9.80% p.a. to 16.60% p.a.

conclusion –

That’s all I wanted to share in this article. You all can post your questions in the comment section.

Also Read ;- What are different ways to invest in International Equities?

2 thoughts on “Loan Against Property (LAP) – A Full Detailed Guide 2022

  1. Pingback: 5 Major Reasons For Health Insurance Claim Rejections 2022. - HIJACK MONEY.com

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